Wondering how I should handle this. My credit is great right now. I had a membership to a gym for years but I was not going. Eventually the credit card they were billing got closed out. Several months ago they sent me a letter saying they could not bill my card and if I didn't submit payment they were going to cancel my membership. I didn't care if they cancelled it so I didn't respond, but it looks like they didn't cancel it like they said and kept charging me. Fast forward to today and I just got a debt collection notice for the gym for $400 (about three months worth of membership). A couple points:
1. They mispelled my last name on the letter.
2. The debt collection agency is just directing me to submit payment directly to the club and not to the debt collector itself.
3. Other than that one letter I mentioned above the gym never contacted me,
4. There is no mention in the letter of reporting the debt to credit bureaus.
I'm pretty pissed. They probably got over a one to two grand from me during all those months where I wasn't even using their facilities at all and yet here they are wanting more. It was a month to month membership not under a contract. Do credit agencies have to warn you before reporting you to credit bureaus? I noticed a few years back this credit agency was sued for threatening to report people to credit bureaus when they had no intention of doing so. I'm just going to go over to the gym tomorrow and try to get this balance off their books. I had the same situation a several years ago where a card was cancelled and they just ended the membership. Any thoughts on how to handle it? If the gym refuses to remove the balance off their books then I will dispute the debt in writing and see if they respond. I just don't want them to suddenly report to the credit bureaus and ahev my entire credit file get jacked up, but I also don't want to be extorted into paying off these bottom dwellers.
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@RobertEG wrote:You obviously have a legal contract issue over whether ceasing payments terminates any continued obligation on your part.
What were the exact terms of the terms membership cancellation, notice, and termination of continued obligation?
Were you still under obligation to pay something when the card was closed?
Did you make any attempt to either notify them when you terminated their ability to charge on the card of the change in payment terms or of your clear intent to cancel the membership?
Those may be questions that only a judge can interpret......
As for whether a debt collector can report their collection to the CRAs without prior notice to the consumer, the answer is yes.
Notice to a consumer only applies after a debt collector has made an initial communication with the consumer.
I signed up for the membership a couple years ago and it was a one year contract which I fufilled. After that it switched month to month. They sent me the letter saying the card was declined and if I didn't remit payment they would end the membership, so I figured the membership would be terminated not that they were going to keep billing me for months, which is the opposite of what their letter said. Even more annoying was there was zero additional communication or bills from them until several months later I get a collection notice. Not a phone call, not an email, not a single piece of mail until it was referred to a colleciton agency. I went down there today and the guy who does the billing was not in, so I have to go back monday. This is more of a local club with only 2 or 3 locations, so I'm hoping to work it out vs if I was dealing with a major chain like NYSC where they just don't care if they screw people over and constantly drag people into court.
@Anonymous wrote:
Read your contract very carefully. Even after the initial 1 year and converting month-to-month, it is typical that the contract contains language placing the burden on you to give notice within a certain period of time, typically in writing, before the membership is truly “cancelled.” Effectively you were converted to monthly mini-contracts which still obligate you to pay. Rental property contracts read much the same way. So a month-to-month after the expiration of the original lease term often includes a 60-day written notice to end the lease. Without reading your contract I cannot say this is the case. However, it would be very common for that type of provision to be included. As to the misspelling of your first name, that would be no problem for them to overcome in a lawsuit as there are many ways to prove identity. Further, before you sue, check your contract because it likely has agreed arbitration prior to suit language. Further, choice of venue for a lawsuit was also probably included and is going to be wherever the gym’s HQ and lawyers are even if it’s in another state. Good luck, and keep us posted!
Well I don't know why I would be doing the suing. They would have to file suit to try to get a judgement. In terms of the gym's HQ it would be in the same county I live because they don't have properties in other counties. If they insist that I have to pay I am going to demand a written copy of the contract I signed. If they can't produce it then they can try to drag it in to court and spin their wheels. Will be interesting to see how good their record keeping is. What I am really annoyed about is the lack of contact and the running up the bill without any additional invoices being sent. If they just charged me for the final month I would have been ok paying that (even they refuse to waive the fee all together I will see if they will settle it with one month's payment), but to tack on two more months without any notice and run up my bill when they now I haven't even attended in over a year? I don't see that as reasonable. I'll see what the guy says on Monday. I have been a member for years and may go back in the future. If he wants to burn that bridge over $400 so be it. I'll make it known to everyone I know and they may lose potential members as a result. I would like to think they will be more reasonable and the gym is a non-profit so I would like to think they are more understanding vs some of the shady corporate chains.
@Anonymous wrote:
OP-Just because they are a “local” gym doesn’t mean they are incorporated locally. Many “local” businesses incorporate in Delaware or elsewhere due to favorable tax considerations. They likely won’t sue you, they’ll just report the collection to the credit bureaus. If you want to risk it over $300 (or whatever the amount is), it’s your choice. They don’t have to provide you with a contract, you were orovided a copy at signing. So if you dispute and they claim it’s valid and report same to credit bureau, you’re out of luck. They may have to provide documentation to CRB, but not to you. Again, is it really worth the risk? If you think it is, great!
How do you know if they provided me one at signing? Maybe they can charge me a minimal copying fee or something but its a bit absurd to say hey you owe me money but I won't even show you the agreement if I dispute receiving a copy. Certainly they have to provide documentation to the credit bureaus so why wouldn't they provide me a copy? And I can tell you for a fact that in court the case would be dismissed if they don't produce a signed agreement. Also, I already checked and they are registered in my state and in my county not somewhere else.